Steve Ballmer may never quiet his most vocal critics, but most Microsoft shareholders will notice that the company’s stock has risen 20.7 percent over the past year. That compares with a gain of 7 percent for the overall Dow Jones Industrial Average of which it is a member. The Seeking Alpha blog comments that Microsoft’s performance shows that “slow growth does not mean slow death.” Another Dow component with Seattle ties, Boeing, has increased 10.4 percent.
One reader says this is one of the greatest rallies ever. I’m not so sure. It can’t compare with the long bull market of the 1990s, and many fundamentals of the economy — unemployment, housing, wages and debt — are working against it. Some Northwest companies have reaped the benefits. Some examples: F5 Networks is at a 52-week high; Starbucks hit that mark earlier this month, and Alaska Air is turning enviable performance for airlines, especially with the headwinds of higher fuel prices.
Not all are rallying, for sure: Paccar is nearly $10 off its high of last April, while Dendreon has lost 72 percent from its high of last spring. Flir Systems, consistently a top performer in the Seattle Times Best of the Northwest, is suffering a tough year, with shares $11 off their highs of last May; the same is true of Expeditors International. Amazon shares are back where they were last spring.
This is a highly unscientific survey. Obviously the overall markets are rising, and each company brings its own set of advantages or troubles. But when even some of the top companies in the region are failing to catch fire, it’s an uneven rally at best. Twelve of the Dow’s 30 industrials are underperforming the index, including General Electric and JPMorgan Chase. Maybe that means there’s room for more growth and mindless speculation hasn’t set the table for a correction. But it could also be a sign that Wall Street’s disconnection from Main Street and the realities on the ground in the world economy call for some skepticism about the daily market report.
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Today’s Econ Haiku:
Anonymous and off stage
Tough act to follow